🐝 Just broke down Nvidia's earnings in the Weekly Buzz and want to kick off a discussion post to hear your thoughts! 🚀 Overall, pretty wild results with a surprise 70% revenue growth projected for fiscal 2028 (well above the 45% expected), and that's the 'supply constrained' number. ✨ From a valuation standpoint, Nvidia is more attractive than it has been in years with a 28x PE ratio, and over 95% analysts tracking the stock have it rated as a strong buy. 😰 My one concern is what WSJ is calling the '$1.5T question Nvidia can't answer' which is basically that the massive AI spending needs $1.5T in revenue to justify the investments, with WSJ saying: “Ultimately, Nvidia and other AI chip makers are living on borrowed time. At some point, big spenders will reach a breaking point where their cash piles are smaller, and they’re unable or unwilling to raise more money from debt or equity investors. If AI turns out to be worth less than it costs, that is inevitable.” 🤔 Curious what everyone's thoughts are on that question, analysts don't seem too concerned but it's definitely something I've been thinking about a lot (both for Nvidia and Mag 7 in general). It's part of the reason I recently sold $META, as unlike some of the other Mag 7, I find the ROI on their AI spending much less clear. 🏆 In any case, Nvidia showed once again why it deserves it's spot as the most valuable company in the world and proved that AI demand is hotter than ever 🔥 👇 Will link my full breakdown in the comments
The significant capital investment is just starting and the AI data center revenue follows that. These data centers take years to build. The revenue will come. 89B of NVDA quarterly revenue came from AI datacenters... That's a quarter. They are ahead of most. Revenue will catch up eventually. Thats why these CEOs are investing all this money bc they see the revenue growth that will come. I am betting on these management teams who have successfully build great companies and are much smarter than me. Bullish AI.
Peekaay @peekaay · 1h
Always a great read 👍
Armand @armand_yeg · 1h
Thanks Max, always a great read.
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